Nikola expands into Canada with dealer network partnership
Nikola Corp. is expanding its electric truck dealer network into Canada via a partnership with Toronto-based commercial trailer manufacturer ITD Industries Inc.
The Phoenix-based electric truck maker announced the partnership with ITD Industries on Friday, stating Canada is a “premium market with a supportive population, industry and government” for addressing impacts of climate change and transitioning toward hydrogen and cleaner fuels.
“Bringing ITD on board as our first Canadian dealer is an exciting move for Nikola,” Steve Girsky, president and CEO of Nikola, said in a statement. “Canada’s zero-emission vehicle friendly environment for Class 8 trucks, fueled by attractive incentives and its ambitious carbon reduction goals, makes it a strategic market for the future of transportation.”
ITD’s showroom and service operations for Nikola’s electric trucks will be integrated into its Toronto-based manufacturing facility, according to a company release.
Nikola’s dealer network expansion would involve sales of both its hydrogen fuel cell and battery-electric trucks, following resolution of a voluntary recall for the latter vehicle type, Nicole Rose, a Nikola spokeswoman, said in an email.
Nikola’s (Nasdaq: NKLA) announcement to expand its dealer network into Canada comes on the heels of the company’s recall of 209 battery-electric trucks and two recent fires related to battery packs in the vehicles.
Last month, Nikola initiated the recall after a third-party investigation determined a coolant leak in a battery pack was the cause of a fire in June at the company’s headquarters.
Internal investigations by Nikola’s safety and engineering teams found that a single supplier component within its battery packs were the likely source of the coolant leaks.
Nikola temporarily halted sales of the battery-electric trucks as a “precautionary measure” and is expected to provide a remedy in mid-October, according to a filing with the National Highway Traffic Safety Administration.
Handling the recall
On Aug. 21, Nikola began working with dealers and customers on arrangements to return the recalled battery-electric trucks to the company’s manufacturing facility in Coolidge for repairs under supervision of its engineering team, according to a letter filed with the NHTSA.
Girsky addressed the company’s voluntary recall in an investor question and answer session on Wednesday. Although Girsky was unable to share a cost estimate or timeline for resolution of the recall, he assured investors the company “is moving in the right direction.”
“It’s not uncommon to discover challenges with products post launch as history has proven with most OEMs anytime they launch a new product or technology,” Girsky said. “And we are certainly not alone when it comes to the challenges faced with the battery technology.”
Girsky said the recall does not impact production of its hydrogen fuel cell trucks because they use battery packs from a different supplier.
Girsky told investors Nikola plans to begin deliveries of its hydrogen fuel cell trucks in late September and early October. He touted the company’s strengthened financial position, stating it will continue to reduce spending and pursue a path toward profitability by the end of 2025.
“We recently raised $125 million and have improved our cash position through reduced cash burn, which we believe will give us the capital to get through the fuel cell launch and well into next year,” he said.
Nikola’s stock closed at $1.19 a share, up 3.4%. Track the stock here.